Huhtamaki Oyj · OMXHEX:HUH1V
Huhtamaki Oyj — Non-Deal Roadshow (March 2018)
48 slides from Huhtamaki Oyj's roadshow presentation, March 2018
Slide 1: Roadshow presentation February-March 2018
Roadshow presentation February-March 2018
Slide 2: We're the global specialist in packaging for food and drink
We’re the global specialist in packaging for food and drink Net sales EBIT margin Our ambition €3.0bn 9.0% The preferred global Comparable growth ROI food packaging brand 3% 13.6% Employees Manufacturing sites Our purpose 17,400 76 Helping great products Operations in reach more people, 34 countries
Slide 3: We're well positioned to deliver on our ambitions
We’re well positioned to deliver on our ambitions Who we are: Who we serve: What we offer: Main materials we use: FOODSERVICE #1 packaging company Paperboard operating globally FIBER PACKAGING #1 company globally Recycled fibers FLEXIBLE PACKAGING Plastic & other #1 company in emerging markets mater
Slide 4: Our three business areas are organized into four reporting segments
Our three business areas are organized into four reporting segments Foodservice Flexible Fiber Share of net sales packaging packaging packaging per segment in 2017 9% 27% 31% 33% Foodservice Europe-Asia- Flexible Packaging Fiber Packagingj Oceania and North America kdfgjkl dhgdfhg – 40 plants on – 2
Slide 5: Foodservice E-A-O: Geared for profitable growth
Foodservice E-A-O: Geared for profitable growth Foodservice paper and plastic disposable tableware, such as cups and lids, is supplied to foodservice operators, fast food restaurants and coffee shops. The segment has production in Europe, South Africa, Middle East, Asia and Oceania. Our products Our
Slide 6: North America: Continue on the growth path
North America: Continue on the growth path The North America segment serves local markets with foodservice packaging, Chinet® disposable tableware as well as ice-cream containers and other consumer goods packaging products. The segment has production in the United States and Mexico. Our products Our
Slide 7: Flexible Packaging: Strengthening our position
Flexible Packaging: Strengthening our position Flexible packaging is used for a wide range of consumer products including food, pet food, hygiene and health care products. The segment serves global markets from production units in Europe, Middle East, Asia and South America. Our products Our competi
Slide 8: Fiber Packaging: Focus on profitable growth to enhance our positions
Fiber Packaging: Focus on profitable growth to enhance our positions Recycled and other natural fibers are used to make fresh product packaging, such as egg, fruit, food and drink packaging. The segment has production in Europe, Oceania, Africa and South America. Our products Our competitive MEUR Lo
Slide 9: FY 2017: A year of continued investment
FY 2017: A year of continued investment
Slide 10: Accelerated comparable growth in emerging markets in Q4
Accelerated comparable growth in emerging markets in Q4 11 Net sales growth split in Q4 17 -35 37 – 5% comparable growth 745 732 – 9% in emerging markets – 1% from acquisitions – Negative currency translation impact of MEUR -35 (app. -5%) – India turned positive in the quarter M€ Q4 16 Comparable Ac
Slide 11: Full-year topline growth burdened by India
Full-year topline growth burdened by India 93 50 -19 Net sales growth split in FY 17 2,989 2,865 – 3% comparable growth – 4% in emerging markets – 2% from acquisitions – Negative currency translation impact of MEUR -19 (app. 1%) – YTD India net sales -4% M€ FY 16 Comparable Acquisitions, Translation
Slide 12: Comparable growth
Comparable growth Q4 17 Q3 17 Q2 17 Q1 17 2016 2017 Long-term ambitions Foodservice EAO 6% 4% 2% 3% 5% 4% 5-7% North America 2% 2% 1% 2% 6% 2% 2-5% Flexible Packaging 9% 7% -2% 3% -1% 4% 6-8% Fiber Packaging 4% 5% 8% 4% 5% 5% 5-7% Group 5% 4% 1% 3% 4% 3% 5+% – Flexible Packaging growth track continu
Slide 13: Continued EPS improvement
Continued EPS improvement MEUR Q4 17 Q4 16 Change FY 2017 FY 2016 Change Highlights Net sales 745.4 731.5 2% 2,988.7 2,865.0 4% – Earnings at a good level, Adjusted EBITDA1 95.3 95.2 0% 389.7 381.8 2% supported by growth Margin 12.8% 13.0% 13.0% 13.3% – Q4 cash flow improvement Adjusted EBIT1 65.0 6
Slide 14: Foreign currency impact clearly negative in the quarter
Foreign currency impact clearly negative in the quarter Closing rates Average Average Foreign currency translation rate 2016 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 rate 2017 impact USD 1.11 1.05 1.07 1.14 1.18 1.19 1.13 INR 74.37 71.09 69.69 73.71 77.11 76.47 73.48 Q4 17: GBP 0.82 0.85 0.86 0.88 0.88 0.89 0.
Slide 15: Plastic resin prices trending upwards
Plastic resin prices trending upwards 140 – Prices for plastic resins were volatile throughout the year, 120 but higher vs. prior year – Prices for paperboard were 100 relatively stable – Recycled fiber on high level, moderated towards year end 80 in Europe 60 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/
Slide 16: Stable debt position
Stable debt position Covenant level 3.5 – Net debt/EBITDA stable at 1.8 AMBITION 2.0 2-3 – At the end of Q4 17 1.9 1.8 1.9 1.8 – Cash and cash equivalents 1.8 1.7 MEUR 116 1.6 – Unused committed credit facilities available MEUR 321 – Funds available for acquisitions approx. MEUR 400-500 0.68 0.66 0.
Slide 17: Debt maturity extended during 2017
Debt maturity extended during 2017 Debt maturity structure December 31, 2017 800 700 – MEUR 150 Schuldschein issued in Q2 600 – MEUR 150 bond (7-year) 500 issued in Q4 at 1.625% 400 coupon 300 – Average maturity 4.6 years at 200 the end of 2017 (3.9 at the 100 end of 2016) MEUR0 2018 2019 2020 2021
Slide 18: Free cash flow burdened by high capex and increase in inventories
Free cash flow burdened by high capex and increase in inventories 386 380 – Capex above prior year level due to growth investments: – LTM capex MEUR 215 of which 100 the North America segment 56 14 MEUR 98 (46%) 2 1 MEUR – Other major investment areas -10 -3 -21 -19 Egypt, China, and Poland -65 -44
Slide 19: Solid financial position
Solid financial position MEUR Dec 2017 Dec 2016 Total assets 2,931 2,875 – As a result of active investment agenda Operating working capital 512 515 → Higher asset base with capex at MEUR 215 → ROI burdened as latest investments not Net debt 698 675 delivering earnings yet Equity & non-controlling i
Slide 20: The Board of Directors aims at predictable and growing dividends
The Board of Directors aims at predictable and growing dividends Dividend payout ratio 40-50% 67% – The Board proposes a €0.80 dividend per share 48% 53% – Adjusted EPS €1.90 47% 47% 47% 40% 40% 42% – Based on Board proposal, 10% increase in dividend → Payout ratio 42% → Dividend yield2 2.3% – Divid
Slide 21: Progress towards our long-term ambitions
Progress towards our long-term ambitions Long-term FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 ambition Organic growth 3% 6% 4% 4% 3% 5+% – Accelerated EBITDA margin 11.2% 11.6% 12.5% 13.3% 13.0% 14+% growth after EBIT margin 7.4% 7.8% 8.7% 9.4% 9.0% 10+% subdued H1 ROI 12.1% 12.6% 14.7% 14.7% 13.6% 15+
Slide 22: Outlook 2018
Outlook 2018 The Group’s trading conditions are expected to remain relatively stable during 2018. The good financial position and ability to generate a positive cash flow will enable the Group to address profitable growth opportunities. Capital expenditure is expected to be approximately at the same
Slide 23: Q4 2017 by business segment
017 by business segment Huhtamaki
Slide 24: Foodservice Europe-Asia-Oceania: Improved EBIT margin
Foodservice Europe-Asia-Oceania: Improved EBIT margin 2016 Net sales MEUR 741 2017 MEUR 808 EBIT margin1 8.5% 8.7% 8 – Robust growth across key product categories 6 – Solid earnings development supported by 4 successful actions to improve competitiveness 2 159 194 195 193 193 205 203 207 – Improved
Slide 25: Improved position and competitiveness in China
Improved position and competitiveness in China Actions taken in 2017: ‐ Invested in 1 unit, bought 2 units, closed 2 units, 1 closure in process ‐ An efficient and focused network consisting of 3 manufacturing units ‐ Capability to service our customers at major markets with highest disposable incom
Slide 26: North America: Investing for future growth
North America: Investing for future growth 2016 Net sales MEUR 1,005 2017 MEUR 1,000 EBIT margin 10.7% 10.4% 12 – Growth moderated by capacity constraints in 10 key categories 8 6 – Strong growth in private label tableware 4 continued 2 235 266 244 260 247 274 235 244 – Limited manufacturing operati
Slide 27: The new facility in Goodyear, Arizona
The new facility in Goodyear, Arizona 27 Roadshow presentation February-March 2018
Slide 28: Flexible Packaging: Strong year-end growth
Flexible Packaging: Strong year-end growth 2016 Net sales MEUR 869 2017 MEUR 913 EBIT margin 8.5% 7.6% 10 – Full year growth at good level in all 8 6 markets except India 4 – Q4 comparable growth 9% 2 0 – India returned to growth in Q4, however -2 218 221 217 214 232 224 230 227 -4% full year -4 Q1
Slide 29: Fiber Packaging: Earnings suffered from weak mix
Fiber Packaging: Earnings suffered from weak mix 2016 Net sales MEUR 268 2017 MEUR 285 EBIT margin 12.9% 9.9% 10 – Overall good topline growth with weaker mix 8 – Continued impact of pesticide scandal in 6 Western Europe 4 – Shift to lower priced packaging 2 – Lack of eggs on the market 66 66 67 69
Slide 30: Growing into a preferred global food packaging brand – next steps
Growing into a preferred global food packaging brand – next steps
Slide 31: Megatrends support food packaging growth
Megatrends support food packaging growth… Food packaging offers stable Innovations create more growth opportunities Food contact sustainable and easy-to-use over the cycle requirements create packaging a higher entry barrier Megatrends create opportunities for us More people Growing middle class Mor
Slide 32: … and our positions offer good opportunities
… and our positions offer good opportunities Focus on consumer Major brand food and drink owners with high growth packaging ambitions as customers Product portfolio Geographic and innovations expansion Our growth opportunities Mature markets Developing markets approx. GDP growth + 2% even GDP growth
Slide 33: We target long-term growth both organically and via acquisitions
We target long-term growth both organically and via acquisitions 3-5 year growth ambition 5+% + 5+% 10+% € 5+bn p.a. if major Comparable Acquisitive acquisition growth growth ambition ambition € 4+bn with capex and add-on acquisitions Net sales Comparable growth 2010 2011 2012 2013 2014 2015 2016* 2
Slide 34: Growth and operational efficiency drive profitability improvement
Growth and operational efficiency drive profitability improvement – Summary of our new long-term ambitions Comparable growth 5+% 10+% 15+% 40-50% EBIT ROI DPS margin 5+% Balancing both EBIT margin and asset velocity → To deliver steadily improving returns Acquisitive growth → To ensure cash for grow
Slide 35: We have built a unique global footprint…
We have built a unique global footprint… Manufacturing units 2010 New manufacturing units 2011-2014 35 Roadshow presentation February-March 2018 New manufacturing units 2015-2017 Sales only Head office
Slide 36: … by making major investments in growth in 2010-2017
… by making major investments in growth in 2010-2017 Short-run flexible Paper and plastic packaging, disposable packaging, Eastern Europe 2013-2017 China & HK Capex M€ 809 Folding carton, M&A spend Pressed UAE, Bags & Malaysia Europe M€2) 473 plates, US wraps, USA, Egypt, Corrugated Russia US, UK, C
Slide 37: How we support our customers' growth
How we support our customers’ growth We invest to expand We’re a safe pair of We offer a wide We take innovation our network and to hands throughout product range to into next level improve our our network make our customers’ loremipsum capabilities loremipsum lives easier loremipsum - Follow global
Slide 38: Helping great products reach more people, more easily
Helping great products reach more people, more easily
Slide 39: Appendices
Appendices
Slide 40: Group financials 2009-2017
Group financials 2009-2017 2017 2016 2015 2014 (1 2013 (1 2012 (2 2011 2010 2009 Net sales MEUR 2,988.7 2,865 2,726 2,236 2,161 2,321 2,043 1,952 1,832 Comparable growth (3 % 3 4 4 6 3 3 5 3 -5 Adjusted EBITDA (4 MEUR 389.7 382 342 259 242 254 208 214 193 Margin (4 % 13.0 13.3 12.5 11.6 11.2 10.9 10
Slide 41: EPS improved in 2017
EPS improved in 2017 MEUR Q4 17 Q4 16 Change FY 2017 FY 2016 Change Q4 17 highlights Net sales 745.4 731.5 2% 2988.7 2,865.0 4% – Volume growth continued Adjusted EBITDA1 95.3 95.2 0% 389.7 381.8 2% – Headwinds in Q4 Margin 12.8% 13.0% 13.0% 13.3% – Currency translation MEUR -35 in topline and MEUR
Slide 42: Quarterly comparable growth by business segment since 2016
Quarterly comparable growth by business segment since 2016 Long-term Q4 17 Q3 17 Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 FY 17 FY 16 FY 15 ambition Foodservice E-A-O 6% 4% 2% 3% 3% 5% 7% 7% 4% 5% 4% 5-7% North America 2% 2% 1% 2% 5% 2% 8% 10% 2% 6% 4% 2-5% Flexible Packaging 9% 7% -2% 3% -3% -3% 2% 1% 4
Slide 43: 14 acquisitions completed since 2011
14 acquisitions completed since 2011 – Paris Packaging, Inc., US, September 2011 (North America) – Ample Industries, Inc., US, November 2011 (North America) – Josco (Holdings) Limited, China, April 2012 (Foodservice E-A-O) – Winterfield, LLC, US, August 2012 (North America) – Webtech Labels Private
Slide 44: Ownership
Ownership Shareholder distribution by sector December 31, 2017 – 30,474 registered shareholders at the end of December 2017 4% – 51% of shares in domestic ownership 10% – 16% of shares controlled by non-profit 6% 49% organizations – Finnish Cultural Foundation a 15% major owner since 1943, current o
Slide 45: Financial calendar 2018
Financial calendar 2018 Week 8 April 25 Annual Accounts 2017 Q1 18 Interim Report & Directors’ Report AGM July 20 October 25 Half-yearly Report Q3 18 Interim Report 2018 45 Roadshow presentation February-March 2018
Slide 46: Disclaimer
Disclaimer Information presented herein contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or Huhtamäki Oyj’s or its affiliates’ (“Huhtamaki”) future financial performance, including, but not limited to, strategic plans, potential growth, expe
Slide 47: Roadshow presentation February-March 2018
47 Roadshow presentation February-March 2018
Slide 48: For further information, please contact us
For further information, please contact us: www.huhtamaki.com » Investors ir@huhtamaki.com